Long term care pharmacies are dealing with a new billing problem – the change in Medicare Part D that affects payments for hospice patients' medications. A large percentage of hospice patients live in health care facilities rather than at home or in an in-patient hospice unit. This living condition complicates the issues hospices are dealing with surrounding the change in medication reimbursement because these patients do not receive their medication from “hospice pharmacies.” The vast majority of hospice patients who reside in nursing homes, assisted living centers, residential care or other long term care settings receive their medications from a long term care pharmacy which has a contractual relationship with the center. This situation exists for practical as well as regulatory reasons. Long term care centers, for the most part, must receive medications for their residents in unit dose or unit of use packaging. Furthermore, regulations for long term care centers dictate that all medication must be available for administration in a timely manner. Finally, long term care centers in most states are not accustomed to dealing with multiple pharmacies in procuring medications for their residents and insist that hospice patients receive their medications from the center’s contracted provider. These and other reasons limit the hospice’s ability to have the medications delivered by mail by a hospice pharmacy or sent in conventional packaging from a retail pharmacy.

Historically, the hospice has contracted with a specialized hospice pharmacy and/or PBM (pharmacy benefit manager). If the hospice patient is in a private home, this pharmacy would either over-night the medications directly to the hospice patient's residence or have them sent from a local pharmacy and billed to the hospice pharmacy through their PBM. The hospice pharmacy, in turn, bills the hospice. If the patient is in a long term care center, the hospice pharmacy or the hospice contacts the long term care pharmacy and identifies the medications for which the hospice will now be financially responsible. The long term care pharmacy would continue to bill all other medications on the patient’s profile (which could be a significant number) to the patient’s primary payor source, which is almost always Medicare Part D.

Starting May 1, the Part D sponsors will stop paying for all medications the hospice patient is utilizing (unless it can be demonstrated that the drug is unrelated to the hospice diagnosis), leaving the long term care pharmacy, facility and patient with a financial issue. A few Part D Plans have already begun to reject the claims. Perhaps these Part D Plans perceive this to be a minor issue, affecting only a small percentage of their members. Indeed, for many of these plans, the total number of all members who are long term care patients is a small percentage of their business. As a result, they may have not yet adequately trained their customer service staff to be aware of this change or how properly to react when a hospice or hospice patient’s responsible party or physician calls to gain an exemption from the regulation. Regardless of how the Part D plans are reacting to these charges, the pharmacy is obligated by their contractual relationship with the long term care center to dispense the medication and must therefore reach out to the hospice, long term care center and/or patient’s family in an attempt to find someone who will accept financial responsibility. To date the response to pharmacy’s inquiries has been underwhelming. In too many instances, each party involved in the process instructs the pharmacy to bill someone else. Most of these patients are actually dually eligible Medicare-Medicaid patients. There simply is not adequate money from any source to pay for these medications. This situation will get much worse once all plans begin rejecting claims in May.

Hospices have been slow to react to this situation, not fully understanding the relationship between their own pharmacy or PBM, the long term care center’s pharmacy and the nursing home or assisted living center. Many hospices currently do not have a business or financial agreement with the long term care pharmacy and have been resistant when receiving calls asking if they will accept responsibility. Some have been advising the pharmacy to bill the long term care center. This is not only impractical (especially in the case of a Medicaid resident), but also against the intent of CMS when they issued this ruling. CMS felt that, once a patient chose hospice, most medications would be discontinued as no longer necessary. This may be true for medications such as those given to lower cholesterol, but would anyone advocate discontinuing a medication for hypertension? Anyone who suffers from this condition and experiences the headaches that ensue when the medication is omitted would never deny it to someone who was admitted to hospice for cancer.Less severe, but equally important when considering patient comfort, would be medications such as omeprazole administered for GERD. Would we deny a dying patient the comfort received from this medication due to payment issues, even if not strictly related to the hospice diagnosis? It is true that there is a mechanism for getting these covered under Part D, and hospice must take the responsibility to determine if drugs are necessary or unnecessary and likewise get these necessary drugs covered.

Hospice organizations would be well-advised to take the lead and deal with this new state of affairs proactively. This is true for all hospice patients, but the complication in long term care, where a third party (the long term care center) is obligated to administer the medication until it is discontinued, and is ordering the medication from a pharmacy not strictly contracted with the hospice, makes the situation more complicated. A thoughtful, well-planned response to this situation will benefit all parties involved, including the hospice itself. Ignoring the issue by not communicating with the pharmacy could lead to the pharmacy not dispensing the medication and to the long term care center possibly being cited by state agencies for lack of medication availability. Hospices attempting to avoid the issue by telling the pharmacy to bill the center or the patient will most likely only cause problems for the long term care centers with whom they work in order to provide care. These problems could easily become serious enough to cause cancellation of hospice-facility contracts. Instead, hospices should contact every pharmacy that contracts with the long term care facilities where the hospice normally has patients. The patient’s Part D plan information should be readily available on the patient’s chart, If not, the hospice should set up procedures with the pharmacy to receive information on all current and future patients' Part D plans to better facilitate calls to request prior authorizations for unrelated medications. Currently, every potential patient’s medications are routinely reviewed by the hospice nurse as part of the hospice patient evaluation process. Going forward, the hospice nurse should also find out how many day’s supply of medications the patient has left on hand at the center. Normally, long term care pharmacies dispense a thirty day’s supply of drugs, so there is a good possibility that the patient may have enough medication on hand to last until the hospice, patient’s responsible party and physician can work through the issue of financial responsibility for the medications. If the patient has a supply of five days or less on hand, the hospice nurse should suggest that the center reorder a limited supply of the medication while the patient is still covered by traditional Medicare Part D. This should be used as a stop gap measure and not a routine practice that could be viewed as circumventing the intentions of the regulation change.

The hospice needs to take the lead in this process, determining if a medication is indeed related to the patient's terminal diagnosis (and, with all the comorbidities that need to be documented, the number of unrelated medications is decreasing), working with physicians to discontinue truly unnecessary drugs, educating patients, responsible parties and physicians on the prior authorization process, ensuring that there is follow through in getting necessary but unrelated medications covered and partnering with the long term care pharmacy on communicating whether or not any medications can and should be billed privately on any particular patient.

But hospices cannot be held responsible for handling this issue alone. In addition to the hospice, it is incumbent upon all parties involved (prescribing physicians, LTC pharmacy providers and nursing homes/assisted living centers etc.) to become educated and proactive participants in their prescribing habits, admission procedures and communications with one another.  A non-collaborative approach will ultimately result in failure. Physicians, whether affiliated or unaffiliated with the hospice, drive the prescribing process and now more than ever, need to understand the importance of prospectively limiting the prescribing of medications unrelated to the terminal condition or related but medically unnecessary now that the patient has chosen hospice. If not already in place, LTC pharmacies should pre-establish non-covered drug policies with each nursing facility that they service to ensure that there are no delays or interruptions in therapy while the hospice prior authorization process is under review.  Nursing homes and assisted living communities need to educate their staff to contact the hospice immediately if the attending physician orders a medication for a hospice patient as a result of a non-hospice diagnosis related change in condition.

Even without this newly-initiated payment confusion, hospice census in long term care centers has been under siege from government entities that have been resistant to understanding the value of hospice care being provided in long term care. Hospices must take care to avoid complicating the delivery of care by causing more angst for the long term care center (in dealing with medication billing issues and unavailability) which will only further reduce the incidence of this necessary service being utilized in the long-term care setting.

With experience in leading both Long Term Care Pharmacies and Hospices, Veltri Healthcare Solutions is eminently qualified to assist both types of organizations in achieving sustainable responses to these revenue stream pressures. For more information, please contact us at samveltri@veltrihealthcaresolutions.com.

Update:  For more on the Medicare Part D problem, see our post Resolved? - The Medicare Part D Mess